LaJollaPharmaceutical(LJPC):PriceTarget$4.

00
Part2inaMultipartSeriesbyArtDoyle

EXCLUSIVE:Q&ASessionwithThomasWei(ManagingDirectorat
TangCapital)

DefinitelyNOTThomas ProbablynotArtDoyle
Wei(ManagingDirector
atTangCapital)

Part1stirredupsomelivelydebateaboutLaJollaPharmaceutical
(LJPC).Whilesomeofyouhadquestions,thebestoneswehave
seenwerefromThomasWeiin2014.Inthisreport,wedoour
besttoanswerThomaspithyquestions.Sendnewquestionsto
artdoyle2017@gmail.com

SPECIALDISCLAIMER:Thisisaparody.WedidnotconductaliveQ&AsessionwithcurrentTangCapital
ManagingDirectorThomasWei.However,wearequotinganACTUALREPORTHEWROTEfromAugust
4,2014whenhewasananalystatJefferies.Everywordattributedtohimisonehehaswritten.So
considerthisaQ&Asessionfrom2014.Onefinalnote:weactuallythinkhisreportisexcellentand
havealotofrespectfortheworkhedidcriticallyanalyzingLaJollaPharmaceuticalandLJPC501.
 Disclaimer

Readingthisreport,youagreethatuseofArtDoyleresearchisatyourownrisk.Innoeventwillyouhold
ArtDoyleoranyaffiliatedpartyliableforanydirectorindirecttradinglossescausedbyanyinformation
inthisreport.Thisreportisnotinvestmentadviceorarecommendationorsolicitationtobuyorsellany
securities.

Youagreetodoyourownresearchandduediligencebeforemakinganyinvestmentdecisionwithrespect
tosecuritiescoveredherein.YourepresenttoArtDoylethatyouhavesufficientinvestmentsophistication
tocriticallyassesstheinformation,analysisandopinionsinthisreport.Youfurtheragreethatyouwillnot
communicatethecontentsofthisreporttoanyotherpersonunlessthatpersonhasagreedtobebound
bythesesametermsofservice.

ConflictofInterestAdvice:Youshouldassumethatonthepublicationdateofthisreport,ArtDoylehasa
netshortpositionwithrespecttotheshares(and/oroptions,swaps,andotherderivativesrelatedtothe
shares)oftheissuerdiscussedinthisreport.Therefore,ArtDoylestandstoprofitintheeventtheissuers
sharepricedeclines,andmayincurinvestmentlossesifsuchissuerssharepriceincreases,followingthe
dateofthisreport.Thisreport,therefore,specificallyemphasizesnegativeaspectsoftheissuerthatArt
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coverorotherwisechangetheformorsubstanceofitspositionintheissuerinitssolediscretionatany
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This research and report includes forwardlooking statements, estimates, projections, assessments,
beliefs,views,andopinionsofArtDoylepreparedwithrespectto,amongotherthings,certainaccounting,
legal,andregulatoryissuestheissuermayfacesandthepotentialimpactofthoseissuesonitsfuture
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This research and report expresses Art Doyle opinions, which have been solely based upon publicly
availableinformation,aswellasinferencesanddeductionsthroughourresearchandanalyticalprocess.
ArtDoylebelievesallfactualinformationcontainedhereintobeaccurateandreliable,andhasobtained
such information from public sources believed to be accurate and reliable. However, the issuer may
possessorhaveaccesstoinformationthatmateriallydiffersfromtheinformationpresentedherein.

Asyoureadthesecriticalquestionsposedbackin2014,wewantyoutotake
thesekeyfactswithyou:
1) LaJollaPharmaceuticalhasnoanswers,becausetheydontexist
2) LaJollasendpointschemeisoverandthisstockwilltradeto$4incash
3) Wearenowcertainthateveryonewhounderstandsthespaceknows
theLaJollastoryisBULLSHIT
4) Wewillcontinuetolayouttheactualfactstomakesurenooneis
manipulatedbyLaJollamanagement

LaJollaPharmaceutical(LJPC):PriceTarget$4.00
Part2inaMultipartSeriesbyArtDoyle
EXCLUSIVE:Q&ASessionwithThomasWei(ManagingDirectoratTang
Capital)
DearFellowAdventurer,
Hereweareagain.IfyoudidntgetachancetoreadpartoneofourMultipart
SeriesonLaJollaPharmaceutical,youcandownloadithere.
We are going to make this really simple. Let us summarize this second La Jolla
Pharmaceuticalreportforyou:
ThomasWei,whoiscurrentlyaManagingDirectorforTangCapital,usedto
bearesearchanalystatJeffries.

TangCapitalanditsprincipalKevinTangarethelargestshareholdersinLa
Jolla Pharmaceutical by a wide margin, especially when one takes into
considerationallthepreferredstockthatthesellsidefailstoaddintothe
fullydilutedsharecountnumber.
WhileatJeffriesinAugustof2014,THOMASWEILAIDOUTTHEBESTSHORT
THESIS ON LA JOLLA PHARMACEUTICAL WE HAVE EVER SEEN. (And Art
meansthatasacompliment.)Excepthedidntmeanto,hewasjustpoking
holesintheLJPC501programthathadaLOTofholesinit.
 WebreakoutourOuijaboardtoconnectwiththepastandallowThomasto
askhiscriticalquestionsfromAugust2014.Butneitherhenorinvestorsare
goingtoliketheanswers.
HereisaquickcliffnotesversionoftheQ&AsessionfortheADDafflicted
readers:

ThomasWeiofTangCapital
Asks:
WillLJPC501hitthenewendpoint
agreeduponbytheFDA?
Will the Phase 3 trial show a
survivalbenefit?
Has LJPC fixed the formulation
issues with angiotensin II (LJPC
501)?
Is LJPCs formulation approach
patentable?
They need orphan drug
designationdotheygetit?
Answer:
No,theychangedtheendpoint.
No.Itfailedthisendpoint.
No, according to issued patents,
public filings and other
angiotensinIIpreparations.
No, according to issued patents
andpublicfilings.
No.

ThereareHUGE,MASSIVEholesinthebullthesisfortheLJPC
501programthatinvestorsneedtowakeupto:
Patents,Formulation,Endpoints,OrphanDrugStatus
Thomasasksthequestions,butyounevergottheanswers!!!!!

HereishowourexclusiveQuestionandAnswerSessionwithThomasWei(ManagingDirectorat
Tang Capital) will work: we will copy and paste Thomas EXACT QUESTIONS (he calls them
controversieswhichisexactlywhattheyare)fromhisreport.WewillthenprovideOURanswers
withthepubliclyavailablematerialswehave.Inthespiritofbeingtransparent,youwillnotice
thatwedontcovereverysinglequestion/controversyinhisreport.Wedontfindthemrelevant
tothebullorbearthesisatthemomentorfindthatwehaveadequatelycoveredthisissuein
our first report or will be covering it in our subsequent reports. But make no mistakethe
commonthemeisthere:bullseitherdontgettheiranswerstoeverysingleoneofThomas
questions or the answers are simply awful. So that you dont flood ol Arts mailbox with
complaintsthatwewerentbeingfair,herearethequestions/complaintsthatwewillnotbefully
addressinginthisreportalongwithourviewontheshortanswer:
1.Istherereallyaneedforanewhypotensiondrug?MAYBE,BUTNOTLJPC501.READ
OURFIRSTREPORTOROURUPCOMINGREPORT#3FORMORE.
4.Isthereariskthatbloodpressuregoestoohigh?YES,STAYTUNEDFORFUTURE
REPORTS.
7.HowbigisthemarketopportunityforLJPC501?ITDOESNTEXISTKEEPREADING,
YOUWILLSEEWHY.
8. Will reimbursement and hospital formulary acceptance be challenging?
CHALLENGING?TRYIMPOSSIBLE.
There.Doesntitfeelgoodwhensomeoneistransparentwithyou?DontyouwishthatLaJolla
PharmaceuticalmanagementwasastransparentwithyouasArt?Withthatmatteraside,lets
moveontotheQ&Asession
OuijaBoardOutLightsCameraAction

FirstMajorIssue:LaJollaPharmaceuticaldidnthitthespecifiedendpoint

ItismentionedmultipletimesinThomasreportwhathewastoldwastheprimaryendpointthat
theFDAsignedoffonforthePhase3clinicaltrialforLJPC501.Itisrightthereinblackandwhite,
memorializedinareport.Theprimaryendpointforthetrialwasthatthepatientwassupposed
tohitaMAPof75orabove.Soitcameasquiteashocktouswhenthecompanyannounced
thatithititsprimaryendpoint.BecauseaswelaidoutinPart1,theprimaryendpointthatwas
specifiedbythecompanyinitstoplineresultsappearedtohavebeenchangedafterthetrialwas
overinDecemberof2016.Sotoansweryourquestion,Thomas,NOtheCompanydidNOThit
theendpointagreeduponbytheFDAinPhase3. Instead,theyappeartohavechangedthe
endpoint to something that specifically fit their trial design and the block randomization
techniquetheywereusingduringenrollment.Seeourfirstreportformuchmoreonthis.
SecondMajorIssue:SurvivalBenefitandtheArtificialProofofEfficacy

FirstwearegoingtoanswerThomasimportantquestionforhimandthenhandthemicrophone
backtohimbecausehemakesoneofthebestpointswehaveseenaboutthisprogramwithhis
ownanswer.Tothekeyquestionofwillthetrialshowasurvivalbenefit,theanswerisNO,LJPC
501DOESNOTSHOWASURVIVALBENEFIT.Wedontcarehowoptimisticyouwanttobeabout
trends.StatisticaltestsexistforareasonandthisoneFAILED.Thereisnootherwayaroundit.
The95%confidenceintervalcrosses1.00(itwas0.57to1.07).WesaythatitFAILEDwithap
valueof0.12andmoveonwiththerestofourlives.TheFDAwillrequireanotherstudybefore
LaJollaPharmaceuticalwouldbeabletosayANYTHINGaboutsurvivalbenefitregardingLJPC
501withthecurrentclinicaldata.ItsstatisticalTESTanditsaFAILURE.
Now,Thomassayssomethingremarkableinhisreport.Inthehighlightedsectionabove,henotes
thereisnoevidencethatraisingthetargetMAPto75isclinicallymeaningful.Whathedidnt
know,butthatweknownow,isthattheCompanydidntevenstickwith75astheendpoint.But
wedigress.Hegoesontosaythatthisjustservesasartificialregulatoryproof.Wecouldnt
agreemore.Itis,aswehavepointedout,apartytrick.Hegoesontosaythatwhatwouldbe
importantwouldbetoreducethedosesofnorepinephrine(whichistoxictothepatient).WE
AGREE,exceptthisisnotsomethingthattheprotocolallowedthephysicianstodo.Itwould
appeartheywereSOfocusedonachievingthisartificialproofatallcoststhattheyignoredthe
abilitytodemonstrateapotentialbenefitintheloweringoftoxicnorepinephrine.Thiswillbe
discussedinlaterreports(ProtocolofDoom)butwecreditThomaswiththeforesightforseeing
howthisprogram*should*havebeendeveloped.AndasforhiscommentthatraisingMAPmay
notevenmatter,wecredithimforcitingthisimportantstudyfromtheNewEnglandJournalof
Medicine:

OneofthesecondaryendpointsfortheLJPC501clinicalstudymeasurescatecholamineusagein
hours3through48.YettheLaJollaPharmaceuticalmanagementhasfailedtosharethisdata
withinvestors.Whataretheoddsthatmanagementwouldholdbackdatashowingthattheir
drugloweredtheuseofcatecholaminesinthetrial(apotentialbenefittopatients)?ZERO.We
believethisendpointfailedlikealltheothersandthequotesfromtheirinvestigatorswecitein
reportonewouldindicatetheyagree.

RaisingMAPwhileprovidingNOOTHERCLINICALBENEFITSis
TOTALLYIRRELEVANT.Clinicianswetalktoagreewiththisas
dosomeofLJPCsowninvestigators.Previousstudiesnotonly
supportthisbutactuallysayitmaybeHARMFUL.
THEFDAHASNOREASONTOAPPROVELJPC501ONTHISDATA.NONE.

ThirdMajorIssue:FormulationIssuesThreatenCommercialViability

After the release of our first report, the Art Doyle hotline (artdoyle2017@gmail.com and
@artdoyle2017)burnedupwithpeopleaskingaboutformulation.ThereappearstobeaLOTof
misinformationoutthereonwhere,exactly,LaJollaPharmaceuticalisontheirformulationfor
LJPC501.Thomasraisesanexcellentquestionbackin2014andfromwhatwearehearingfrom
ourreaders,mostofyoucantgetastraightansweronthissamequestionallthewayinApril
2017whenLaJollaPharmaceuticalisallegedlyabouttolaunchacommercialproduct.Again,
Thomashasdonesomeexcellentworkgettingrighttotheissue.WhyisangiotensinIIhardto
formulate?Wellforstartersitshalflifeincirculationisabout30seconds.Andaswaspointed
outinthe2014report,frozenangiotensinIIhadtobethawedeverysevenhoursforthepilot
Phase 2 trial. We dont need to tell you that isnt a commercially viable product. The
managementteamistellingyouthattheyaregoingtohaveashelfstableversionatsometime
inthefuture.ThatisthesamethingtheytoldThomasin2014.No,theyarentTHEYFAILED.
Its a pipedream and its important for a couple of reasons. First is this is a VERY expensive
commercialproducttheyareclaimingtheyaregoingtosell.Anditcanonlybestoredinthe
fridgeforafewmonths?!?IfthepatientflowisanythingliketheUSclinicalsitetrialrecruitment
there is going to be a lot of wasted product. Second, you cant get a defensible patent on
angiotensinIIwithsomestabilizingbuffersinavial.Thatisntaninvention.Thatisageneric.
AndthatiswhatLaJollaPharmaceuticalisplanningonputtingonthe(refrigerator)shelf.Asking
forafriend:exactlyhowmanyvialsareinvolvedinthereconstitutionprocessforeachdose?
Onefinalthing.Thisproducttheyareclaimingtheyaregoingtosellforthousandsandthousands
ofdollars?Itsworthpennies.Youcanbuyitonline.Hereareacoupleofvendorsthatwillsell
youaTONofangiotensinIIonline.Goodstuff,too.Lookathowcheapitis.Hereisonefrom
SigmaAldrich:

Letscomparisonshop.HowaboutotherchemicalconglomerateEnzo?

Art has dibs on the arb opportunity between Enzo and Sigma Aldrich angiotensin II pricing.
Backoff.Aretheseguysdevelopingdrugs?No.ButitisEXACTLYthesamestuff.Didyouever
noticethisinthePHASE3protocolforLJPC501:

DoyounoticehowitjustsaysthedrugisangiotensinII?Nottruncated,PEGylatedangiotensin
IIinabuffer?Imean,theyevendescribethattheplacebois0.9%sodiumchloridesolution.
Thatsprettyspecific.ButLJPC501isjustthechemical?Whydoesthismatter?Well,because
theLaJollahasstuckwiththeoriginalmoleculeandthishasputtheminacornerwherethey
cant get any decent intellectual property. The basic properties of angiotensin II have been
knownforDECADESandapplyingthemtoapatientunmodifiedisntaninvention.Theytease
theshelfstableformulationbecausethatwouldshowthattheyhavesomethingthatisactually
uniqueandproprietary.Butyetherewearein2017withnoactualsolution,justemptypromises.

FormulationforangiotensinIIisaMAJORISSUEandwe
believeLaJollaPharmaceuticalhasFAILEDREPEATEDLYto
makeacommerciallyviable,proprietaryproduct.Instead,
theyoftentellinvestorstheywillfixitlaterandhavemade
progressinthelab.ThisisaMAJORREDFLAGandwithouta
shelfstableformulationthatisreadytolaunchNOW,LJPC501
isNOTVIABLEandisntaproductatall.

FourthMajorIssue:Patents(orlackthereof)

TheLaJollaPharmaceuticalmanagementteamfrequentlytalksaboutitsintellectualproperty
aroundLJPC501.Intherecentconferencecalltodiscussthedata,theysaidtheyhadclaimsout
to2034.Wefeelthatisalittlemisleading.Theydohave3issuedpatentsonLJPC501,butare
theyonaspecificdrug?Inaword,NO.Pertheirmostrecent10K,theyhavethreeISSUED
patentsrelatedtotheirleaddrugprogramLJPC501(emphasisours):
1) US9220745(Chawla):AMETHODoftreatingasubject
 2) US9457059(Tidmarsh):AMETHODoftreatingrenalfailureassociatedwithcirrhosis1
3) US9572856(Chawla):AMETHODoftreatinglowbloodpressure
Whatistheprevailingthemehere?Asaninvestor,doyoufeellikethisisanindomitablepatent
estate?Doyoufeelthatthiscoversanactualdrug?OFCOURSENOT!Thesearemethodpatents.
Andoneofthemisforanindicationthattheyabandoned.ButallthePENDINGpatents,you
say.OK,letshavealookatoneofthose.Hereisoneoftheonlypublishedfilingswecouldfind
relatedtoLJPC501thatwouldberelevanttoThomaspointonformulation.Wewillletyouread
itforyourselfbutitdoesNOTteachtoaspecificformulation.Instead,itisanexhaustivelistof
thingsthatoneCOULDdoinordertoimproveformulationofangiotensinII.

LaJollaPharmaceuticalDOESNOTHAVEANISSUEDPATENT
FORITSFORMULATION.ThisleavesthedoorWIDEOPENfor
anyandallcompetitorstocreateageneric.
TheirMETHODPATENTSarejustTREATMENTALGORITHMS.

BONUSMAJORISSUE:OrphanDrugStatus(anotherthingLaJollaDoesntHave)

Wesaiditinthebeginningofthereportandwewillsayitagain:ThomasWeididanexcellent
jobwithhisanalysis.WebelievehefairlyanalyzedthatthepatentabilityofangiotensinIIwould
benearlyimpossibleandweagree.Sohehunghishatbackin2014onthemgettingOrphan
Drug Designation for LJPC501. This would hold off a generic entrant seven years until 2025

1
What?!yousay.Oneoftheirthreepreciousfiledpatentsisrelatedtotheirabruptlyabandoneddevelopment
ofLJPC501forhepatorenalsyndrome?Andhasnothingtodowithcatecholamineresistanthypotension?Yes.
Readitandweep.
(assuminga2018launch).Anyonewhohasspentmorethanadayinvestinginbiotechstocks
can see where he was going with this. Orphan Drug Designation is about as easy to get as
admissionintoyourlocalJuniorCollege(Artsalmamater).Soeasy,infact,thatCongresshas
wonderedwhattheheckisgoingonlatelyanddotheyneedtomakechangestotheprogram.
Buttheprogramisstillintactandwascertainlyintactwhenthecompanypublishedthis:

Maybethatwasntabigyearfororphandrugapplicationsordesignations?Thinkagain:

ITWASTHEBIGGEST.
MaybetheFDAjusttakesreallylongwithitsdecisionslike3or4years?Thinkagain(fromtheFDAsown
OrphanDrugBlog):

WecannotfindinasingleSECdocument,pressreleaseorcorporatepresentationsinceJuly2014
any mention of the orphan drug status for LJPC501. Say it with us: La Jolla Pharmaceutical
FAILEDTOGETORPHANDRUGSTATUSFORLJPC501andNEVERDISCLOSEDTHATFACT.So
Thomas aceinthehole seven year exclusivity is out the window, and investors should be
headingforthehills.

Wearentsurewhichisthebiggerredflag:Thefactthatthey
failedtogetOrphanDrugDesignationforLJPC501orthat
theydidnttellyou.
UsingThomasmathoncompetitors:2025minusseven
yearsOrphanDrugexclusivityis2018.
ButLJPC501willNEVERgetpassedtheFDAsothatis
justoneMOREmassiveredflagforinvestors.

Comingnextto@artdoyle2017:
Many,manymorereportsonLaJollaPharmaceuticalscoveringsuchtopicsas:
OurcorrespondencewiththeFDAregardingLJPC501
TheProtocolofDoom:whyalltheotherendpointsfailed(practicallybydesign)
ACEintheHole:findingsuperresponderstostackthedeckintheLJPC501trial